Slight growth

Last year the US beer market enjoyed a bit of a bumpy ride. After a tough start, with a stumbling economy and consumer fears in the aftermath of 9/11, beer consumption bounced back in the fourth quarter. While results were mixed for individual brands in 2002, the overall picture looked bright, given the brewing industry’s performance early in the year. It has been estimated that domestic beer volume grew about 0.7 percent while import volume rose about 6.0 percent which made for a combined industry growth of modest 1.3 percent.
The prevailing trends, which affect the US beer market, are: consolidation in the industry, the changing face of beer consumers, continued growth of premium and super-premium products and the gradual shift to lighter beers..

Adieu, then

Pabst Brewing Co., the fourth-largest beer company in the US, has hired investment bankers Merrill Lynch to investigate its options, which can only mean that the US brewer has effectively been put up for sale. Valuations range from USD350 million to USD500 million. Rumour has it that Brian Kovalchuk, President and Chief Executive prefers a sale of
the entire business rather than individual brands. Whether there’s anybody out there willing to spend good money on dying standard brands - only time will tell.
Pabst was founded in Milwaukee more than 150 years ago but closed its brewery in Milwaukee in 1996. In the mid-1980s the S&P Company, founded by corporate raider Paul Kal-manovitz, purchased Pabst and subsequently moved its corporate headquarters to San Antonio..

How to talk to twentysomethings

Even Jim Koch, who founded The Boston Beer Company in 1984 and introduced the company’s flagship beer, Samuel Adams Boston Lager, in April 1985, has had to learn the lesson that every year it gets harder to keep the froth on a leading-edge beer brand. After almost 20 years in the market, Sam Adams is now just another speciality beer brand on a very cluttered shelf. Sam Adams may still be the best selling craft beer in the US market, but like its faithful consumers, the brand has grown middle-aged. As Koch himself admitted to local media, the brand continues to stand for quality, passion, authenticity and innovation, yet he does not know how to communicate that to a 23-year-old.
For six years, Boston Beer sales have been stuck at USD200 million..

Miller axed 200 jobs

In September Miller Brewing Co reduced its staff by about 200 positions at the company’s corporate offices in Milwaukee. The move will leave about 800 corporate positions. Those who are let go will be offered severance benefits and outplacement services. No brewery jobs were affected, though. The layoffs had been expected since May, when Norman Adami, Miller’s President, said that Miller was planning a restructuring that would cut jobs in its headquarters. According to local reports, Miller’s market share in Wisconsin has fallen in the last four years. Miller’s share of the Wisconsin beer market was 46.6% at the end of 1999, compared to 29% for Anheuser-Busch. By the end of last year, Miller’s market share had dropped to 45.2%, while Anheuser-Busch had boosted its share to 32.3%.

Mixed results

The beer markets of Latin America paint a very diverse picture with consumption pattern varying widely from country to country. Despite the political scene being more stable than it has been in decades, many countries continue to suffer from an economic fall-out following the relatively strong growth of the 1990s. In turn, this has affected beer consumption, which has traditionally been closely correlated with economic growth. According to a report from Canadean, total consumption remained almost static in 2002, dipping only slightly compared with the previous year.
Latin America represents a huge market, encompassing some 17 countries with a combined population of more than 490 million people.
As a result of lower pricing, consumption grew fastest in Peru.6%..

Schmoozing up to A-B

According to Molson’s Daniel O’Neill, the brewing industry has seen USD25 billion worth of acquisitions since 1999. Big acquirers have often overpaid, with many take-overs costing 12 or more times annual operating earnings he was quoted as saying. In contrast, Molson paid 9.8 times annual operating earnings to buy Brazilian brewer Kaiser. Among the Big Four (i.e. Anheuser-Busch, SABMiller, Interbrew and Heineken) only Anheuser-Busch, which has stayed close to the US market it dominates, has added shareholder value, O’Neill said. Just fancy that.

Sorry, not for sale

And we’d thought that those bullish CEO superstars were a thing of the past. But along comes Daniel O’Neill, 50, CEO of Molson, and announces in September that he is going to double Molson’s profits by 2009. In fact, he wants to make at least CND1 billion in profit before interest and taxes by 2009 - but does not plan any acquisitions in the short term to help him meet that target. "By 2009" ... that gives Molson five years to realise this more than ambitious plan, given that Canada’s largest brewer only posted a pre-tax profit of CND515.6 million for the year to March 2003.
At a recent investor briefing O’Neill showed confident that improving market shares in Canada, Brazil and the US plus entering other export markets would do the trick.S.".

Schincariol’s owner shot dead

Already on 18 August Jose Nelson Schincariol, 60, the owner of Brazil’s third biggest brewery group, Schincariol, was shot and killed when he arrived at home at 10.30 p.m. according to local news services. Two men fired five shots at Schincariol as he stepped out of his car. Schincariol lived in Itu, where the company’s headquarters are, about 130 km to the west of Sao Paulo. Schincariol was inside his garage alone when he was shot. He had no private security guards. Although he was taken to hospital immediately, he died three hours later.
Schincariol headed Brazil’s fastest growing beer business. Founded in 1939, the company produces 13 million hl annually of beer, water and softdrinks and employs about 6,000 people in six plants across the country..

It's hot in the city

An increasingly acrimonious labour dispute has been disrupting Labatt’s operations in Montreal during a crucial season marked by heat waves and festivals. The 950 workers at the Labatt plant in suburban LaSalle, who walked off the job on 16 June, are push

Big ain't always beautiful

140 jobs will be cut when Molson closes the 75-year old Ribeirao Preto brewery in an effort to eliminate overcapacity. Molson announced that, as part of the Projeto Duzentos, Cervejarias Kaiser is closing its oldest brewery. This measure will save about C